50th ANNIVERSARY OF THE ROYAL OAK 5402st

So here we are, soon, to the so called  peak, to the expected paroxysm of prices for the iconic Royal Oak as we celebrate its 50th anniversary.

Major auction houses will either do a thematic auction like PHILLIPS or reserve substantial amount of Royal Oak within their season offering. This intense marketing should result in high price achievements across the board.

One can wonder what will happen after that. Trying to find inspiration from what happened during the 40 years of the Nautilus is most likely wrong as it was starting from a much lower price base. I will leave to each of us the relative importance of a 40 vs 50 years anniversary.

IMHO a plateau -at best- or a consolidation is in front of us for the model. Extremelly few quality and rare Royal Oak circulate ahead of these auctions as dealers and also collectors retain them. Expect much more people willing to supply them afterwards at the levels seen at auctions. Even with a 10-15% discount from these price levels.

The question is how high is high and how big the consolidation can be. Considering the bid/offer and timing optimization is it really worth parting with your beloved Royal Oak now or after the auction? Typically a correction takes about 12-18 months. As quantative easing across the globe get partially unwound and interest rates rise a bit over that same period (say until mid 2023) we will have a favourable environment to « clean » the market and cut a slice of the speculative crowd.

I would simply refrain from buying now the classic Royal Oak which tripled or more over the last last 2-3 years. For true collectors the upcoming auctions can be as always the opportunity to seize ultra rare and priceless pieces. But for the (relatively) « common » RO you should pass unless the price was not substantially inflated or interesting in relative value (ref. 25594 for example stands out as fairly cheap in the recent RO price dynamics).

Beyond the event itself the universally beloved design of the Royal Oak will not ceased to be admired. Not at all. There is still a large majority of collectors out there other than millenials (no offence) that are not in the collecting game for the money. Only the « floating » ie. number of timepieces offered to the market will increase and the population of buyers should diminish during this « wait & see » period. The (numerous) short term speculators will be out and the buyers will be sidelined until a proper price is reached.

This can actually be uncorrelated with the price of the other iconic models namely the 3700 Nautilus and the 6263 Daytona as while these 3 tend to move in a quite similar way historically, a temporary dislocation can happen. This is the case on the Daytona 6263 which has been lagging the Nautilus and the Royal Oak for the last 2-3 years.

In that respect the 50th anniversary of the Royal Oak should not be the black swan of the overall watches market but rather a transition to a more healthy market. The « heart » of AP, namely the Royal Oak shape and the skeleton version, should nonetheless be pretty solid especially the earlier QP version with non-leap year as they are truely representative of the state of the art know-how of the brand.

Good luck